Leakage currents in InAlN/GaN-based high-electron-mobility transistors considered for normally-off devices critically depend on the oxidation behavior of InAlN thin films. Herein, lattice-matched InAlN thin films deposited on GaN (0001) are rapid thermally annealed at 800 C in an oxygen-rich environment. Aberration-corrected scanning transmission electron microscopy combined with electron energy-loss spectroscopy is used to systematically characterize the oxidation behavior of InAlN films as a function of annealing time. Initial growth of oxide layers is found to be reaction limited, which is replaced by a diffusion limited growth process once a critical thickness of the oxide layer is obtained. Growing oxide layers are amorphous and become porous with increasing annealing time.